Now Playing

2/14/2012 5:00PM

The Payroll Tax Showdown

Columnist Kim Strassel on whether House Republicans will agree to extend the payroll tax holiday for another 10 months without paying for it. Plus, should the Romney campaign be worried by Rick Santorum’s surge?

This transcript has been automatically generated and may not be 100% accurate.

... well Republicans and Democrats avoid yet another fight over the payroll tax ... and ... the school choice cut crime rates ... welcome to Opinion Journal Live on Jason Riley in my first guest today as columnist ... Kim straw salted talk about the latest ... on the payroll tax cut that they welcome camp ... I think ... so Kim Republicans have said they wanted to extend the tax cut ... but wanted to spending cuts to offset ... the cost of doing that now they're dropping that demand for the spending cuts outcome ... well I think the news a three-day Center Republican finely worked out that this was a very bad political issue for them and that they needed to be on it ... how were they had it that I think we ever since they first agreed with the president ... to cut the payroll tax they bend them condition wherein the Fresno wanted to extend it they either had to go along for the plain people who didn't want to have ... that ... now what they've been trying to do is you said it planned to ... soon demand that there be certain offsets to pay for that the cost of the payroll tax reduction ... to cut the budget elsewhere that what they come to realize that ... all the White House's had to do all want to say no and then make it look as though they were the ones that were holding up his ongoing tax reduction for Americans so ... yes they have finally decided that they all just simply push this through they want demand out there and I'm hoping to get about nine ... and and that ... to be fair to the Republicans here and there was some merit ... to their a game and I think one one was that ... they argue that since these this payroll tax cut is temporary ... it doesn't have the growth the facts of of Marshall tax cuts ... of them Republicans like to push forth I can lay ... on the payroll tax cuts fun so Security craft ... and they were the ring in the Humboldt counts in that time you meet the demand was back before they ever agreed to do this for what ... I and I mean from political perspective and that's the problem they're running up again for those are principled arguments temporary tax policy never does much for the economy or for the people reading getting at ... but because they agree to this the one point they were having a hard time making an argument for why should and now landed them is putting the president to their right on tax policy ... and I guess it's generally agreed that the last time they have a showdown over this issue late last year ... the president got the better of the of the Republican Congress the PR was ... he did and here was the problem is that they they now had extended for two months ... on what you can see that the White House and Senate Democrats wrangling or was it though that the Republicans wouldn't simply pop up and get a yearlong deal ... the Democrats are fine with that they were saying plan let's have another two month extension of what to do this again in two months time I went into a two month that the that what what is in this all with the election ... continue to present new bag of the people holding that tax reductions and ... they decided they didn't want that anymore ... now the other part of this issue involves unemployment benefits and ... Medicare reimbursement for doctors how will the GOP play those issues camp ... well this was one of the smart things that they did do and what they've done that they had the couple these issues Democrats of them pushing to have a deal that encompassed all of this ... an extension of the payroll tax cut a fix to the Medicare dog problem ... and also jobless benefits which altogether would cost about a hundred and sixty billion dollars ... but the Republicans gun and demanded decoupled these issues they're saying yes we'll do the payroll tax cut extension ... I we won't demand that there be paid for is for that for those of the two things were still going to have to stand at the table and make cuts in the budgie if you want those extended ... to kill the golden on him greater political liability ... and that by taking them apart they should be able to force the Democrats on those issues at least to come to the table and do some reductions in spending ... okay so I guess the plateau for Eleni here is that ... of the payroll tax affecting some one hundred and sixty million ... Americans Republicans could afford him the wrong side of that ... unemployment benefits covered Opel the same way I'd take it ... now when they feel much more common and it interesting when they finally decoupled those two issues and said fine ... we'll come to the table will pass they add payroll tax ... continuation tomorrow and go for the Holy year ... in you that didn't have to keep wrangling about the the things that lead the Democrats have been dragging their feet on the sole deal because they like this are the political issue ... certainly when it looked as though they may not get all that now suddenly everyone is very interested in having a big discussion about having all of that that the package in actually finding something to cut the paper those latter two items ... okay um what's what's the presidential race came in I don't know it you've heard that ... any of the canons of weighed in on this ... payroll tax cut debate the half please please let us know I'd be curious ... aam but a couple new polls out show Rick Santorum ... continuing ... to do well aam has he become ... Romney's principal challenger here on means one more contest Newt Gingrich ... he's aam ... he has more delegates ... it is he right now though the person ... that the state to challenge on the Romney one-on-one ... I think the key words and knows there are rate now how can they get lonely has seen in this race obviously it again and again ... the concern of electric scheme saying hey we are not ... real with Mentor Amin as our only help you know are only two place ... when you're willing to give the interview that the shot maybe be a boomer and former staff before that was new Gingrich before that it was Herman Cain ... Michele Bachmann simple and they sang get the somebody ... will give you an opportunity now well apps and that's what's gonna happen going for Rick Santorum had some words don't believe this guy in the limelight ... he's done up in the polls ... we've got two big races coming up Michigan and Arizona ... and in his goal is going to have to be to work and one of those I'll or do very well continue the momentum going into the big Super Tuesday contests without the mark set ... okay ... um I'm wondering if the last couple weeks aam had been Chifley good ... for Rick Santorum in the sense that social issues that sports a ... have come to the point that the gay marriage issue out in California ... we've had the Obamacare contraceptive issues ... really I'll play right into his wheelhouse of this week ... and you think that are the reason on his head up especially good past couple weeks ... there's no question or ever is also the fact that in these races that he won this past week three of them he beat Mr Romney ... was also that Mr Romney won the necessarily out in full force in the statement didn't preoccupied with floor to ... Rick Santorum was there he put in that I mean putting the effort and that counted for something with conservative voters ... now one thing that's interesting Jason Aunt Tami Italy if if if you look at ... bolt Mr Romney and Mr. Santorum even all these social issues of them coming to perform well ... maybe we like and lately ... they've been particulary in the freezing mentioned and ... that they're going to happen really start putting a big emphasis on their economic method which is really been lacking a ball for them some of the month but at ... an afterthought or it's not been very personalize by either candidate so we had ... Rick Santorum's and can be giving an address I mentioned and I and and there's an expectation that he's going to try to round out his economic policy firming up some ... and then not long after that Mr Romney is expected to give a very big speech in this again to which people are expecting people to the St ... okay one more minute ... left him ... you mention the Arizona and Michigan contest coming up ... I guess those will tell us whether Rick Santorum's surge is for real has made lags ... how worried I due sense of the Romney campaign is right now ... how serious they are they taking this and has Romney turned ... turned his out ... campaign war chest onto our Rick Santorum ... he and I think the real measure of how worried that Mr Romney and that there is actually called for the first time that he is going to need to retool his methods ... couldn't you focus possibly put out a new tax reform plan ... this is our silly but it is one of the main thing from the campaign and you know what they've done before is simply as you said train and downs of the iPhone and I don't think Rick Santorum to think he intended to get that tree he well ... the fact that Mr Romney is simultaneously attempting to that ... goal out there was something bolder to attract conservatives in his on lap that I think it's a change in notable ... of their will leave it there and thank you for joining us thank you ... for imitate the commercial break I will be right back ... welcome back to Opinion Journal Live on Jason Riley in joining me Nexus atom ... Emerson of the Fordham Institute to talk about ... present Obama is the recent budget proposal and school choice welcome Adam ... thank you very much ... so moments after the president's budget was released last Friday getting these e mails ... in my inbox I'm about how might affect the DC ... voucher program ... which gives scholarships to low income students who attend ... private school of what happens to the program under the of the president's budget and a ... lot of friends and inviting its the theory clearly provides noting funny ... or on the program the effect of these rules about using the program ... I'm sure there's enough funny in the program be curious to see the two thousand fourteen school year ... aam but on there is no fun in it begins this one didn't put it in not in the story today to wind down the program ... on and in a completely turns that you heres the House speaker and in April ... on it that ... this was unexpected ... of families who had enrolled in the program ... on we're sure that all things have been some signs the program that has seen great demand as Clayton who was sixty percent ... on after the reauthorization from landscape ... on so this is very surprising in an area where the defence that is a ... so you mention that the up that the program is popular ... um do we have any evidence that it's improving ... and cheaper improving educational outcomes for kids ... with the education our own independent Evaluator with studying the program and ... then followed a graduation rates in particular ... all aam of participants were about ninety one percent and one percent graduation rate compares to my fifty six percent graduation rate ... by DC public schools ... ah for those who sought about your isn't a hint of it was the seven separate retreat but ... on the high school completion rates alone ... our catering on there is achievement is on par with the public school system ... on this is a program that is working this program that has great appeal ... on to some of the most disadvantaged families in DC ... on just last week there was an application and that that was held with very little mark I you ... are on seven hundred people and show how to sew ... on it there's a there's a great event for the program and so on and ... it is a new funding for an undefined and so ... on and seventy billion dollar education budget ... really most of the dusts twenty million dollars to twenty million dollar rental broker so doesn't ... it doesn't are it doesn't ... work ... it's interesting you mention the on ... the graduation rates ... and only last month that the state of the Union address you might recall the president ... was talking about dropout rates in the importance of kids staying in school he asked ... each state to raise their dropout age eighteen ... aam ... many turned rapidly and without a budget ... that that tries to shutter a program that is improving ... graduation rates helping to close the achievement gap doesn't seem to make a lot of parents ... well and in forcefully he's he's taken ... the voucher program to familiar territory mean this goes back two thousandnine when he when he sought to kill the program and ... on and is based on conversations unfortunately as the program grows as it brings in more than once ... we are having conversations about how to make the program better if we wanted and were conversations of a program for up to the different now ... of all we don't need you as a throwback crustacean weak weak weak and yet ... we know how this program succeeds in and getting hints ... on to graduate from high school ... ASA was unfortunate optics an election year ... ahh and force me into the sea yes the US ... um that the president ... likes to say is for school choice those I'm Secretary of Education Arne Edano when they point ... to their support for charter schools as evidence of that and indeed the administration has been of strong supporter ... of charter school expansion ... why do they draw the line and school vouchers ... all in ... all I need to it with great conviction as as a matter of fact and here is a lot of little interest in public education debate you need to multiply that ... aam but this is this is one time where they say parents can open your feet ... on every public school option but they can't use open this ... on one private school option does the D C opportunity scholarship Big is busy gives one more on just one more option ... and to families who might find in a better fit ... on this does not see private schools are better than opens moves its twelve thousand dollars voucher compared with twenty five thousand dollars per student funding ... in the scene of this was on so it's it's again ... it's unfortunate politics that comes into its ... own for some people the private school I can this is done is this alignment can cross off but it's unfortunate in me and if you can just advance the conversation ... a little bit to make the policies that meet the program's better ... ah I I think we can begin to find more who do you think this has to do with that being a lack Cheniere of that that the teachers unions don't like vouchers I'm in the present of course when teacher union support for November ... I think it has ... begun to him being an election year than in April ... on this this this register is quite a bit of news ... when he reached a deal with the nearby a cooled off ... I after manner days in and we were able to move on and on and in the program itself was able to begin figuring out how to properly enroll students in the program ... and we hear any opposition from from either the president warned in a sector that ... on line in politics ... to ... its workforce to his breed ... okay um thank you very much for joining us ... thank you ... will leave it there ... I want to continue the education of discussion with our next guest ... professor David Deming of Harvard who ... has a new ... study out on the link between school choice ... and crime rates is joining us next welcome Professor ... I didn't use the ... so ... you look at whether the opportunity to attend a school other than the one you then it's time to ... can reduce criminal activity of what it upon professor ... this is a sure ... Heard postal systems the agency didn't announce any ... is the show's under a state ... thirty five years is that this choice when ... Umar the end of the state was in so ... that ... he actually is this for a little car I was ... reading returns as the city's schools of ... he just did it by neighborhoods ... parents to choose some other school and one which they reside and so it ... was their students while ... exceeded its analysts believe relative to the neighbors will Steve's loss ... and found that in seven years later ... Union nearly twenty eight minute on last run is concentrated among African-American students ... with Miss Laura's were ... it's ... it ... gets pretty attractive to the present was ... okay ... we know that ... high school graduates are less likely to be incarcerated ... then school dropouts of SOEs is just a matter of ... because school choice improves highschool graduation rates ... it follows that I last looked if you're in the moment current ... surprisingly downbeat has actually turned out that this is it's ... it's leading to a twenty nine increase graduation rates an unassailable ... Mr Beattie stayed in school a bit longer ... it seems like ... in ... this really just ... aam ... you are missing and thrown it into early on in middle school students it is ... that they had to commit fewer crimes ... that never Rascal would ... be a few ... rounds ... ignore ... trends that are worth ... less costly to society considers actually ... getting pretty ... on ... these issues are really on the margins of school as for the first place in the last minute ... I actually did a very low levels of education in schools in Iraq or it might be ... okay very interesting now ... you mentioned a couple times of that to ... you're here ... you can talk about your findings on the impact from a black remain secure ... I he talked about the students are typically marginalize ... aam you can eat up all the talk about the racial aspects of this ... yes the any worse Charles president on ... a special history with the race ... I and schools I ... really want the shows is that I'm on again among the center's students ... who are for sale or else other than to school the school was there so I ... get it into law veteran Citigroup the racial odds of it ... it's really just there's ... there's ... you know ... the students who are disproportionately black that you live in inner city neighborhoods ... in this in schools ... in a judgment of this ... that was an in sixteen ... ten is still so ... by their Overby au Prince the twenty eight pounds BT ... and engage with their they also add these many ... programs that were located in inner city more ... feasible or does that work really are ... on the markets get to that tendency what's happening is that seems worthwhile ... to get out of their neighbors ... I think of moving on the audio can you grab the phone with ... her ... parents ... up to the region ... are either ... okay ... um ... you say that your study imploding here ... it makes sense for oversubscribed schools of choice ... to give preferential admission to students ... at greatest risk of criminal activities so the linkages that strong ... so so what I did there would be the lottery I did great for research are trying ... to win the division schools but actually he do ... that um that would benefit more from what others ... get it by far the debate that we find that ... it be due to high risk for private benefit both within the lottery we actually went that you can ... agree or a repeat of what we could prevent war crimes ... what do differently ... finally I want that too much about methodology ... just ... to help the wondrous them how you're comparing apples to apples and apples and oranges ... as I understand it you compare kids who were admitted to the school for the lottery process ... with kids that apply ... to our process that did not win cracked ... that that the idea while eleven declined going right ... right so it is the key here is that all of this they wanted to go to this particular school Italy the move of God and because they just got up and got a really good lottery number and ... got a really ... bad lottery numbers show ... that has been a really good Apple Apple to get all of that ... I chose not to get the more motivated parents got their children to how they all wanted to go gorgeous images with one of the draw ... that lousy pregnant ... okay okay I will leave it there thank you for joining us ... to be with you ... women take one more commercial break and will be right back ... welcome back to Opinion Journal Live on Jason Riley in joining me next is Russell cites the Manhattan Institute ... to talk about an effort by lawmakers to make new York City and even more expensive place to do business ... while Thomas decides ... I'm good so so state lawmakers want to increase the minimum wage ... I'll what what are they proposing aam strikes ... underrated from seven twenty five and over age fifty an hour and an index of directors to the consumer price difference ... OK seven eleven seventeen percent hike in the up the minimum wage rate announcement is this the state of the city of New York or what ... this is your state then yes it would be about seventy percent increase and depending on inflation and stops when you are deep in boxes at over two years principal grades of up to nine thirty seven ... that now ... is Governor Cuomo and Mayor Bloomberg on board the bus ... the governor has ... not to embrace the speakers over proposal itself but instead that except boy ... he's interested minimum wage but he wants to talk to numerous people first as to possible repercussions ... Chevrolet TheReformedBroker has ... not endorsed any specific proposal but has mentioned testing support for ... a minimum wage increase ... sch um and just about Bloomberg's response because I and all that he's been on on record opposing living wage lives ... the first a city subsidized project so ... he must realize that the thought ... that they would they would do some damage of why wonder why he doesn't sound ... still the same way about minimum wage increases any idea ... I really can't be with the narrowing of the kids ... in the history of the people should not have to live on ... fifty thousand dollars year ... but the fact the matter of when we talk about that is they don't because we yet ... have been very generous earned income tax credit of the federal and state level that supplement which is already ... well yes let's talk about that was because silver's argument ... for ... raising the rates ... I believe his argument is that is the getting of the notion that people shouldn't have to live on fifteen thousand dollars year which is the full ... minimum wage of seven and a quarter ... of the reality is his own house and the Senate agreed to ... back in nineteen ninety four and subsequently expanded over four years from ninety eight two thousand for them ... to pass the standard income tax credit which collectively between the federal credit and the state Credit supplements wages to the tune of four point five ... billion dollars already effectively taking any ... what say you have a single head of household with two children earning minimum wage to a poll ... of ... one of their wage effectively is not seven twenty five an hour because of the Yankees deepen its ten dollars and forty four cents ... and out of the proponents of the minimum wage increases that you didn't mention your good ... tax credit which is refundable ... and which is a judge yet they got out of money is to sweep under the rug ... ok proponents of of minimum wage hikes I'm ... often talk about how ... it will help lift ... people out of poverty ... aam ... it's an anti poverty measure ... for a lot of folks and that's how showing the pitch ... to the public um ... you mentioned a single head of household two kids three kids ... of that the main breadwinner the family earning minimum wage is that the typical minimum wage recipient ... which is the other point that doesn't notice ... there's a copious amount of research and director ... researchers studied this issue for ... over two decades the ... David Newmarket when you watch or just about a book on minimum wages that collected about a hundred studies show that the preponderance ... of the evidence says that it does little or nothing as far is targeting the people of what the hell ... and it does little or nothing as far as reducing poverty as many minimum wage earners are second or the household ... their diverse their semi skilled or even very low skilled workers whose cost is already high ... we're business to hire seven or twenty five and are about to say that he's so ... it's a really poorly targeted ways to help for households particularly when we have a very ... targeted mechanism like the federal and state tourney of banks that that that is ... already doing that for more effectively reaching people for probably the maximum benefit ... in the range of ten to twenty thousand dollars a year whereas ... collectively the minimum wage should increase would DeVry's bridges across the board and how many households ... most households that are not for all ... and it's also ... has the effect of Prising certain people out of the labor market to claim younger ... and less experienced workers that businesses can afford to hire ... I believe that sector does well in again the research was cited in which you can add to a recent study that was done ... just about to New York state when there was proposals look that when a reporter ... an hour or so years ago ... that said that it would result in twenty nine thousand jobs lost but more so than at the point you're making is that ... if you raise the cost of higher in a ... semi skilled entry level worker with the big show underwear they simply haven't had a labor market Mr Huertas should still said ... raising the cost of iron from seven twenty but be that he is going to have a very chilling effect on businesses ... being in the parable for instance when you translate what the speaker is doing in the real dollars ... it said twenty six hundred dollars additionally per year per employee yet many of the of ... but as I heard these workers ... are small businesses ... and that's a major blow to ... the payrolls and when you face that ... you really yet you get ... your possibly brother watching ... that little choice other than combining pass among fewer workers ... or simply yet ... laid off or ... or moving investments right because there are some neighboring states ... that will have a lower minimum wage if this passes cracked ... yes so we will jump over Connecticut which is you know they didn't order a little jump over New Jersey which are still look seven reporter and indexing features perhaps the most ... pernicious nature of gold going forward because ... the we shed for for employers the wait will continue via the less we get ... have a period of these euro inflation rate will continue to go up ... okay now my understanding is that the iam State Senate which is controlled by Republicans ... is I'm supposing this aam ... any chance of the mom ... actually being it'll block this from happening at the government got governor does get on board ... I keno I don't know I mean you know with the new foal to become the worst reading in the final hours ... they just appear very rigorous in their opposition right now as I think they should be a ... window of European either that or an approach that most of the business the search business Council of New York National Federation of Independent Business ... of any other ... employment sectors understand the cost of this is ... a regional issue I mean is that ... it isn't the case for staying near to the many people are making more ... than what the minimum wage of the increased use of their last word but ... some state senators and more rural areas upstate in Western New York ... it might have a ... larger impact of their ... I think that's ... definitely true ... I think the reality that that that that will have disproportionally ... impacted western central New York and other areas are I think and believe it will still evident that he didn't ... even in your city where you've got a ... one of the main higher in areas of low income ... earner ... it is is the healthcare sector ... and driving up the cost by twenty six hundred dollars per employee of a home you're sitting or other settings like that ... I will have significant impact but believed so hard to tell the Senate is a tough period but ... doing right now that the ... extension their opposition to the governor again has not embraced the proposal ... of what's to talk to others ... in the final hours of all that one can ever tell ... OK I will will leave it there thank you for joining us the suspects ... I appreciated the deal ... that's all for today's opinion Journal I've ... please join us tomorrow and every weekday at five pm Eastern ... on Jason Riley